Nick Giambruno: Tell us what you think it means to be a successful contrarian and how that relates to investing in crisis markets throughout the world.
Jim Rogers :
Well, there are two aspects of it. One is being a trader, being able to
buy panic, and nearly always if you are a trader or an investor, if you
buy panic, you are going to do okay.
it is better for the traders, because when there is a panic—a war
breaks out or something like that—everything collapses, and some people
are very good at jumping in and buying. Then, when the rally comes, the
next day or the next month, they sell out.
the people who are investors can also do that, but it usually takes
longer for there to be a permanent rally. In other words, if there's a
war and stocks go from 100 to 30 and everybody jumps in, it may rally up
to 50, and then the traders will get out, it may go back to 30 again.
I'm trying to make the differentiation between investors and traders
an investor, nearly always if you buy panic and you know what you are
doing, and then hold on for a number of years, you are going to make a
lot of money.
also have to be sure that your crisis or panic is not the end of the
world, though. If war breaks out, you have got to make sure it's a
used to work with Roy Neuberger, who was one of the great traders of
all time, and whenever stocks would panic down, he was usually one of
the few buyers, because he knew he could get a rally—if not that day, at
least maybe that week or that month. And he nearly always did. No
matter how bad the news, especially if there's a huge drop, it's
probably a good time to buy if you've got the staying power and your
wits, because you will likely get a rally. In terms of panic buying or
crisis situations, that's normally the way to play.
it's not always easy, because you are having everybody you know, or
everybody in the media shrieking what a fool you are to even try
something like that. But if you have your wits about you and you know
what you are doing, and you know enough about yourself, then chances are
you will make a lot of money.
Jim Rogers started trading the stock market with $600 in 1968.In 1973 he formed the Quantum Fund with the legendary investor George Soros before retiring, a multi millionaire at the age of 37. Rogers and Soros helped steer the fund to a miraculous 4,200% return over the 10 year span of the fund while the S&P 500 returned just 47%.